Invoice Discounting Is No Longer the Answer

There was once a time when the only answer to financing your cash flow was by asking your bank for a loan or overdraft, or factoring your invoices. However, although invoice discounting offered a different way of achieving the same result, it had one thing in common with the other solutions: debt.

At this time, if you needed to finance your cash flow you had to borrow against your unpaid invoices. The only choice you had was which form of borrowing to use. There was no alternative to debt.

But now there is.

URICA’s supply chain funding makes invoice discounting redundant

URICA’s supply chain funding puts cash into your supply chain. It was born out of a belief that there had to be a better way than debt to fuel the supply chain. You can read the story here.

Read on to see how URICA’s supply chain funding solution makes invoice discounting a thing of the past.

URICA’s supply chain funding is cash not debt

If you’ve used invoice discounting products you will know that they typically lend you between 75% and 85% of your unpaid invoices. This is because it is debt not cash.

URICA pays you 100% of your invoices as cash less a small discount. This can be as quickly as 24 hours after your customer has approved your invoice. It’s as if your customer has paid you cash.

Just one, simple, easy-to-understand fee

When URICA pays you cash it deducts a small discount from your payment. The charges that go with invoice discounting are many and varied. They’re expensive too. With set-up costs, annual running costs, exit fees, and invoice fees forming just a few of the 35 or so different methods of charging, fees are just one of the dangers of invoice discounting.

No lengthy and complicated contracts

URICA’s terms and conditions run to around two pages of easy-to-understand English. There are no rigid conditions that trap you into something you don’t want or need – you can opt in or out, invoice by invoice. And there are no exit clauses.

Contrast this with the tediously difficult invoice discounting contract that your lender will tie you into. A contract that your lender will only offer you once it has completed an audit of your business to satisfy itself about the likelihood of you repaying your debt.

No comeback. Ever.

Because URICA pays you cash you don’t owe anything. Because you don’t owe anything you can’t be in a position where you have to pay money back. So what happens if your customer doesn’t pay your invoice, an invoice that URICA has already paid you cash for? This shouldn’t happen because URICA will already have assessed your customer’s credit worthiness and your customer will have approved your invoice. However, should it happen, it would be URICA’s loss. There is no comeback on you.

This can never be the case with invoice discounting because you are the borrower. The money the invoice discounter has paid you is simply an advance against an unpaid invoice, a debt that you will repay once your customer pays your invoice. If your customer doesn’t pay then your business will have to find the money from somewhere else to repay the debt.

Camilla Bellhouse

As a Network Development Manager at URICA, Camilla has worked with a number of businesses across the UK and gained an insight into business funding issues. She is an expert in Construction, Aerospace, Media & Advertising and Engineering.

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